Investors and entrepreneurs have faced more than a few challenges thanks to the coronavirus pandemic. But it appears that women have borne the brunt of the pandemic’s wrath. Last year, women lost a staggering $800 billion in income, more than the combined Gross Domestic Product (GDP) of 98 countries. It’s a disturbing number, to be sure. But there is more to the story than meets the eye.1
As the pandemic took hold in early 2020, a trend of disproportionate impact on women—and women of color, in particular—began to emerge. In the industries hit hardest, such as hospitality, tourism, and education, women held more jobs. The Bureau of Labor Statistics reported that women accounted for 55 percent of the 20.5 million jobs lost in April of last year, boosting the unemployment rate for adult women to nearly 15 percent (up from 3.1 percent in February).1
The unemployment rates for women of color were even more painful, reaching 16.4 percent for Black women and 20.2 percent for Hispanic women. By contrast, the unemployment rate for men was 13 percent.1
Many have referred to this phenomenon as a “she-cession” (perhaps a nod to the so-called “man-cession” of 2008 that struck men with disproportionate force). In addition to the jobs that disappeared, over 400,000 more women than men left their jobs, many of them to care for children due to school closures.2,3
Remembering the Context
Stepping back from pandemic-era tribulations for a moment, there is no doubt that women have long faced unique financial challenges that make saving for retirement particularly tough. Take the gender wage gap, for example. Women make an average of 80.5 cents for every dollar that their male counterparts make in a similar job (for Black women, it’s 63 cents). Progress has been made, but equal pay remains an unreached aspiration for many.4
Women also face unique challenges inherent in the roles they tend to occupy. They are more likely than men to be caregivers to children, sick family members, or aging parents.7 This means they may experience more time out of the workforce over the course of their careers, which can translate to lower total lifetime earnings, smaller retirement accounts, and reduced Social Security benefits upon retirement. In fact, the average Social Security retired worker benefit for women is $14,928 per year, compared to $18,780 for men.5
These impacts are further compounded by the life expectancy gap. On average, women tend to live 6–8 years longer than men, meaning more retirement years for which they need to prepare.6
In the context of pandemic-fueled woes, this dense knot of preexisting adverse facts and figures can paint a grim picture. But there are some golden threads woven into this. She-cession or no, it’s important to remember that in recent years, women have been rising to these challenges in inspiring ways. Let’s look at the wider picture.
Still Making Strides
Women are saving more now than they were before the pandemic. According to Fidelity Investments, women contributed to their retirement accounts at record-high levels in Q4 of 2020. And thanks to strong market performance, their average retirement account balances reached record-high levels as well. While past market performance does not guarantee future results, these are encouraging data points to consider on the heels of an unprecedented financial year.7,8
The pandemic also spurred more women to take the plunge into entrepreneurship. Between April 2020 and April 2021, the US Census Bureau reported an increase in new business applications of 110 percent, with female entrepreneurs launching a whopping 1,821 new businesses per day in 2020. What’s more, 64 percent of new women-owned businesses were started by women of color, a number that is particularly impressive considering that Black and Latina women were hardest hit by job loss last year.9,10
Don’t Call It a Comeback
Despite the pandemic, women have continued to make financial advances. In 2021, nearly 8 percent of Fortune 500 companies have women CEOs. That might seem like a small number, but it is an all-time record, marking a 21 percent increase over 2019, proof that even a pandemic could not halt progress.11
Also, the future looks promising for women. Today, women earn 60 percent of all master’s degrees and 54 percent of doctoral degrees. They control 51 percent of personal wealth in the US, an estimated $22 trillion, and over the next 40 years, they stand to inherit $28.7 trillion in intergenerational wealth.12, 13
Clearly, while the challenges women face are real, their potential is just as potent.
Change Is the Only Constant
The pandemic hasn’t made life easy for any of us. For women, the challenges of this “she-cession” have been truly monumental. But tough times also bring opportunities to dig deep, clarify priorities, and try new things.
An experienced financial professional can help you weather trials and prepare for pivotal moments of change. If you’re facing a transition, a decision, or even a shift into entrepreneurship, that’s a great time to reach out.
Empowering Steps to Take Right Now
In unpredictable times, the smartest thing to do is remember the basics. Here are five empowering moves that women (or anyone) can make.
Build an Emergency Fund. Saving up for a rainy-day scenario (a sudden job loss, major medical expenditure, or global pandemic) is super smart. Six months’ salary can be an ideal goal.
Cover Your Assets. Insurance coverage may also play a role in your financial strategy. Being well insured can help manage headaches down the road.
Never Stop Learning. While a financial professional may be able to guides your future, it is still important to stay engaged and aware. The more you continue to educate yourself, the better.
Consider Investing Differently. Since women tend to live longer than men, they may have more years ahead to finance. Talk to a financial professional about appropriate long-term strategies.
Prepare Your Legacy. Keeping beneficiaries updated, making those tough extended care decisions, and preparing an estate strategy are smart ways to prepare for all phases of life.
1. NYTimes.com, May 9, 2020
2. BLS.gov, July 2, 2021
3. TheAtlantic.com, July 9, 2009
4. AmericanProgress.org, March 24, 2020
5. NPR.org, May 26, 2021
6. Forbes.com, July 10, 2019
7. WHO.int, 2021
8. MarketWatch.com, February 18, 2021
9. BusinessWire.com, February 18, 2021
10. WashingtonPost.com, January 21, 2021
11. WomenCEOReport.org, 2021
12. AEI.org, October 15, 2020
13. VisualCapitalist.com, March 4, 2019